Stay up to date on Miami entrepreneurs, events, research and more.
When I became an entrepreneur, I would have loved to know more about digital growth or growth hacking. That’s why, following Endeavor’s “pay it forward” philosophy – about sharing resources, knowledge and experience with other entrepreneurs – I want to share what I would have liked to know about this topic and what lessons I will take with me on my next endeavor.
In 2012 I founded Carrot, the first car sharing company in Mexico. That same year we were selected as Endeavor Entrepreneurs, in large part due to the exponential growth our company was experiencing during its early years of operation.
Our company was growing at a rate of 300% year over year for the first four years of operations, earning us widespread media coverage, the attention of venture funds and possibilities to expand to multiple cities. However, our story was filled with several growth-related mistakes.
In 2017 I left Carrot to return to school. I earned my master’s in Artificial Intelligence from Stanford and took time to reflect on what we could have done better as well as what I would do better next time I create a startup. These are my four most important takeaways on growth hacking:
Lesson 1: Growth Hacking and the 1% Rule
When I first learned about the concept of growth hacking, I was fascinated by the concept. The idea of finding a tool, a key strategy, a hack that unleashes exponential growth for a company had me obsessed for months on end.
The classic cases of growth hacking include Airbnb who managed to “hack” Craigslist so that each time someone posted their apartment on Craigslist an automated email from Airbnb would be sent to the user (read more about the case here).
Another classic example is Dropbox, who successfully established a referral system unlike any other in the world. Its product, cloud storage space, was so valuable that referring friends to earn more storage became such a high value proposition that it automatically went viral.
Our mistake was believing that there was “ONE STRATEGY” that would boost the growth of our company on its own. That we were one stroke of inspiration away from finding a tool that would make us go viral. However, studying the cases described above in more detail, I realized various things that interacted at the same time:
For these reasons, I now think of growth hacking in terms of systems. Where the acquisition of users is the tip of the iceberg, supported by a great product that fulfills its brand promise and the expectations of its users.
I like to think of growth hacking as a culmination of actions and processes that make a company 1% better every day and grow 40 times better over the course of a year. (I highly recommend this article covering how an olympic cycling team went from being non-existent to dominating the sport by applying this principle).
Lesson 2: Automate Marketing Processes
This is likely the most important lesson I have learned. I firmly believe that without automation of marketing processes it is impossible to grow. Simply stated, the more manual processes required, the more growth bottlenecks are created.
The most common manual processes are: database segmentation, email creation, promotions for conversion, and spreadsheets for statistical measurement. However, it’s possible to automate all these processes with tools like drip.
Having a 100% automated conversion funnel allows you to unlock and empower growth teams to achieve rapid execution. Which brings me to the next point.
Lesson 3: Align the Company’s Strategy around A/B Testing
Once a continuous improvement mindset is adopted by the company (specifically for digital marketing processes), and a way to automate marketing funnels is established throughout the company, the next step is to focus efforts on continuously executing marketing experiments. Some of the most successful digital entrepreneurs in the world say that a digital company must run at least one experiment per day, with the best executing about 10 per week.
The purpose of executing events in a continuous manner is simple: optimize the experiments with the most successful results in regards to a specific goal (product, marketing, revenue, etc.) and discard the ones [experiments] that aren’t working.
Every experiment must: i) start with a specific and measurable goal (for example, increase leads at the top of the funnel, or improve the conversion between free and paid users,), ii) have an analytical way of tracking results and statistical relevance (having robust data analysis is crucial), and iii) have a well defined objective for our experiment (specifically, what are we trying to change about the way we currently operate).
If you want to know more about maximizing a growth strategy online you can read my personal blog here.
Lesson 4: There are more than 15 Digital Marketing Channels
Perhaps the biggest mistake we make is assuming that the only digital marketing channels that we can use are paid: Facebook and Google. I’ve seen many companies make this same mistake without stopping to think about the other 18 digital marketing channels that exist that don’t necessarily require payment to be effective online. (You can read about them here.)
Talking about these 15+ channels could be another blog on its own, but overall this should inspire any entrepreneur to start trying to maximize their strategies around unpaid channels. Each channel should be tested, automate the processes for acquiring each channel and run daily experiments to see what works for every platform. Throw out whatever does not work and double-down on efforts that yield the best results.
My final reflection regards the mindset the company adopts. I believe that a common mistake (and one that we certainly committed) was being averse to having imperfect campaigns, visuals, and marketing materials. This caused each experiment to take much longer to execute than necessary and results took longer to assess.
Today, a phrase that resonates with me is “perfect is the enemy of good enough”; and this is certainly a statement that rings true in any company properly optimizing itself for digital growth.
This article is a translation of “4 Lecciones Sobre Growth Hacking” by Diego Solorzana, Endeavor Entrepreneur from the Endeavor Mexico Office. Translation by Endeavor Staff member Eric Marroquin with additional support from Laura Ginebra.
© 2022 Endeavor Miami
All Rights Reserved
396 Alhambra Circle, Suite 202
Coral Gables, FL 33134
+1 786 953 7541
Endeavor Global, Inc.
900 Broadway, Suite 301
New York, NY 10003
Website by BRITEWEB